Richard Gleeson
Northern News Services

NNSL (Sep 27/99) - The cost of fuelling up a four-wheeler, snowmachine, boat or pickup truck is never cheap in the North and it may soon be going up.

Fact File
Cost of gas (cents/litre, regular unleaded on Sept. 17)
Yellowknife	77.9
Inuvik	89.0
Ft. Smith	62.9
Ft. Providence	75.5
Wha Ti	85.9
Sachs Harbour	75.9
Kugluktuk	80.9
Grise Fiord	71.0
Gjoa Haven	85.9
Baker Lake	76.9
Coral Harbour	79.93
Iqaluit, Nunavut	73.1

Though the NWT's most southerly community, Fort Smith, checked in with the lowest price, the survey revealed the cost of gas does not necessarily rise the further North you go.

For example, gas costs less in Grise Fiord than it does in Yellowknife.

"The gas in our tanks was delivered a year and a half ago," said hamlet employee Robert Sheaves. "We only get gas delivered once every two years."

Government statistics indicate the Canadian mean average retail price of gas was 50 cents a litre in September, 1998. This month it is 62 cents per litre.

Division of the territories has further contributed to the cost of gas. Brian Austin, director of the NWT government's petroleum products division, said the loss of economies of scale has hit the west a little harder than the east.

"The west, in terms of fuel consumption, is much lower than Nunavut," said Austin.

Both governments subsidize the cost of gas in all but a few communities.

In the west, the Financial Management Board sets the price of gas in the 18 communities where private distributors are either unwilling or unable to do business. In all but three eastern communities the Nunavut government's financial and administrative board sets the price, said Nunavut petroleum products division controller Roy Green.

Both governments absorb the cost of infrastructure such as tanks and pumps, but the remaining costs are, theoretically at least, covered by what consumers pay at the pumps.

"The revolving fund rules specify we must recover the operational costs of providing the fuel," said Austin. That includes the cost of the gas, paying a local agent to distribute it and transporting the fuel to the community.

Operational costs, particularly transportation, vary from community to community, partly accounting for the price differences at the pumps. Those variations are offset to a degree by the government contributions. The government is obliged to ensure essential goods and services are not only available in remote communities but also affordable.

But the government's operating costs are not being covered, Austin said -- "Revenue from retail sales is certainly less than the cost of providing the service," he said.

Green was reluctant to talk about whether the Nunavut government is covering the operating costs of its gas subsidy program because an annual review of the program is currently under way.

"I can tell you this," he said, "There hasn't been a price increase since 1996, with the exception of minor variations."

In the last 10 years, the financial management board has hiked the price of subsidized gas only three times, said Austin.

Austin said his division is currently putting together a proposal to the FMBS that will attempt to address the problems of increasing gas prices and the loss of economies of scale that came with division.